How do I Make a Transparency to Decal my Object? (Blender Render Only)
All you have to do really is save your texture in an image format that supports transparency. Any with alpha channels should do like PNG, TGA, TIFF, or any other supported by Blender.

You can use any image editing software like GIMP, or Krita, or Photoshop to remove the background of your image and make your decal texture.

Then in Blender add a new texture to your material

Under the Properties Window > Texture Tab > Image Mapping change the Extension mode to Clipping

Under the Mapping panel Change the Coordinates type to Object and bellow pick any object in your scene to control the position of your decal.

You may create an Empty type of object specifically for this, then use it to control the position of the decal, move it about, scale it to set the size, and rotate it to match the surface normal.

Have in mind that this will only work in the rendered view, viewport preview is not supported.

Example file